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SANTIAGO, June 11 (Reuters) - Chile’s central bank held the benchmark interest rate at 3.0 percent on Thursday, as widely expected, and maintained its neutral bias.
The bank cut the interest rate 200 basis points between October 2013 and October 2014 to stimulate the economy of the top copper exporter, which had been hurt like other Latin American countries by a commodities slowdown.
The bank had formerly indicated it would resume tightening later in 2015 or in early 2016, although last week said that may take longer than anticipated, with the economic recovery weaker than forecast.
At the same time, after more than a year of being above its 2 percent to 4 percent tolerance range, annual inflation is returning to target, although still high at 4 percent.
“In May, inflation was in line with forecasts and is expected to post high annual rates for some months. Its evolution will continue to be monitored with special attention,” the bank board said in a statement after the meeting.
Economists at Santander said that they expected the rate to be held steady at its current level until the first quarter of 2016, and for “the normalization process of the monetary policy rate to be slow, and for it to even remain expansive.”
Reporting by Santiago bureau; Editing by Chris Reese and Grant McCool